Profit margins — 4-mark calculation

GCSE · Business Studies · Edexcel · 2.4.1 — Business calculations: gross profit, net profit, gross profit margin, net profit margin, average rate of return (ARR); calculating from given data

Question

NightOwl Bakery had the following financial data for last year:

Revenue: £240,000
Cost of goods sold: £144,000
Other operating expenses: £60,000

(a) Calculate the gross profit. [1 mark] (b) Calculate the gross profit margin. [1 mark] (c) Calculate the net profit. [1 mark] (d) Calculate the net profit margin. Give your answer to 1 decimal place. [1 mark]

Mark scheme (AO2): (a) Gross profit = 240,000 − 144,000 = £96,000 (B1) (b) GPM = (96,000 ÷ 240,000) × 100 = 40% (B1; accept 40.0%) (c) Net profit = 96,000 − 60,000 = £36,000 (B1; follow through) (d) NPM = (36,000 ÷ 240,000) × 100 = 15.0% (B1; follow through; must be to 1 d.p.)

Total: 4 marks.

4 marks · take your time before peeking.

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Generated by TopMyGrade AI · cross-check official sources before relying on the mark-scheme phrasing.